ECB Sees Inflation Near 3% Through End of 2026 Amid Energy Costs

The European Central Bank (ECB) is anticipating that inflation in the euro area will remain close to 3% through the rest of this year, driven by high energy costs stemming from the ongoing conflict in the Middle East.

This assessment comes after euro-area inflation reached 2.9% in July, surpassing the central bank's 2% target. Energy was already the fastest-rising major component of euro-area prices in June, increasing 8.7% from a year earlier, according to Eurostat data.

ECB Chief Economist Philip Lane expects consumer-price growth to hover around 3% for the remainder of the year, although the trajectory will depend heavily on developments in the Middle East.